9511663 Spiller Telecommunications is an industry which is undergoing rapid change and renewed competition. In this era, there is still no general agreement about the appropriate approach for encouraging modernization of the regulated U.S. telephone system. This research will specifically look at the impact of regulation on modernization through local exchange companies' adoption of digital infrastructure. Prior research has found that various forms of incentive regulation, and in particular price regulation, has led to greater deployment of digital infrastructure than has traditional rate of return regulation. In addition that price regulation works more effectively than earnings-sharing schemes, although price regulation works better paired with earnings-sharing schemes than when used alone. The proposed research builds on this previous research by looking at the political influences on adoption of particular regulatory schemes and on the speed of adoption of digital infrastructure. A data set which includes political variables will be constructed to facilitate this research.
